Innovation is ridden with misconceptions and in the 10+ years of innovation consulting with my own company we have seen them all. So I have finally decided to create a page for it here and will be posting back to the Virtuser Google+ and Virtuser Facebook updates if you wish to follow its evolution, pun partially intended.

I shall deal with the misconceptions in order that they occur and will be adding them as I go:

Innovation Strategy

Innovation should be a key part of any Company's ongoing corporate strategy, but it is generally not. There are various elements of a company's strategy that touch on it;
  1. business modelling usually maps both its place in the company's portfolio after it has happened, as well as the gap that innovation leaves; 
  2. research and development budget is assigned almost randomly (nokia at one point spent 16%
  3. a product cycle refers to a mythical creature called "product development" which without 1 or 2 above will just be buying new products from your usual product suppliers and calling it innovation.
In reality Innovation should be part of company strategy, and it generally is in companies with huge growth, however its not always documented or mapped, which helps its success and minimises potential backlashes we see below: essentially, most people who have innovated are familiar with the usual BCG matrix of how much of a business is a cash cow vs. a rising star, etc. 

How the growth matrix shifts axis with Innovation vs. business as usual
Innovation has the Boston consulting market growth forces pulling against each other, creating a radar chart in the middle (grey) showing where a company is in terms of innovation. Kodak, unfortunately, could be seen heading from left to down over the last few years as covered here

Innovation = products & the next big thing

Innovation does not need to be the next greatest thing, most great products are an off-shoot of smaller innovations, the iPhone was an offshoot of a flurry into iPod, itself big, but a huge punt, but nothing compared to the iPhone. The apple TV is just a "hobby" but could be huge...

Innovation can be licensing something out as patents, there was a big ho-ha with Nokia post Elop, that it spent too much on R&D (engadgetBusiness weekIt Pro, and AllthingsD) and where are the products to show. Unfortunately these superficial rants fail to take into account that innovation does not always create a product, the fruits are often hidden in:
  1. License payments and royalties you will only find deep in financial reports
  2. Economies of scale almost impossible to quantify directly, but meant that some in-house products like the high end Nokia N95s where costing nokia sub $20 to make by the end of their run whilst their competition was buying ODM and OEM and many times that cost
  3. Marketing: going to your suppliers and clients with a great story pushes a company way up its list in terms of value and PR. Its the equivalent of a celebrity doing charity work!
  4. other costs: often in-house experience and knowledge gained from one innovation project, even if it did not prove a product, can give your team the experience and knowledge of the product process which have a huge effect on the companies existing and future products, right down to the way services are sourced. 
  5. team work: so many companies have silos: its often easier in tech to ask a competitor or a recruitment company who does some particular job that asking an internal system or person or even internal HR.. Innovation makes individuals aware of how they fit within the organisation, how they interact with other departments and moreover how simple things can affect the bigger ecosystem, like one person not processing a request can delay a product launch by months or even miss a huge PR opportunity all together. 
In short; innovation is the best team building, long-term cost cutting, & awareness exercise a company can do - If its done right.
It is important to account for these properly, as while the benefits of an R&D project can drive down the costs of your raw materials and services as per points 2 and 4 above, these are difficult to quantify unless you have an Innovation strategy that identifies how much time departments and individuals are doing, etc. which can be used to counteract articles like those above (I despair when any supposed technologist questions and large r&d spend...)

Innovation that is pulled is not necessarily a failure
There is a huge stigma to failure, of innovation but there need not be: especially if the innovation has been carried out by a major corporate. A great example of this is Nokia Money being axed. There is no mistake to be made, mobile money is as much the future as plastic and merchant payments were 20 years before, however, how the future pans out is unclear, as is who will be part of the value chain. A big mistake many people make is trying to take on too much of the process: I have seen mobile payments project after another m-payment project fail as the operator / infrastructure / bank divisions got blurred and parties strayed from their core, which is generally bad.

However in this case: Nokia invested a modest sum in a key emerging market, where there core business is very strong and growing, for which they have developed key now products and m-payments is still in its infancy. Nokia were also the first to put NFC in handsets and as such have been a part of every m-payments project I have been a part of. So:

  1. Has Nokia Money given Nokia invaluable insight into the future: yes!
  2. has Nokia money given positive exposure, marketing and CRM for its core product in a core market: yes
  3. Was the investment in line with what a typical marketing campaign would cost to get that much coverage: yes
  4. Has this affected Nokia's market value or shareholder value: to the contrary - the spent wisely and got out timely, its what market types call a "win-win" :)
  5. Do you as a consumer see Nokia in a better light - yes?
  6. Has it raised Nokia's profile as a competitor or solution provider - yes
  7. has it made employees feel like Nokia is an innovative company they want to be a part or - yes...
So what's the problem? bring on innovation!

Innovation is for life, not just for Christmas


I shall be adding more in the coming months the Virtuser Google+ and Virtuser Facebook updates will let you know about them.

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